Will the circular economy achieve its objective of decoupling resource addiction from economic growth in time?
Are we going to get enough buy-in to ensure leaders, chief executives, managers, customers, suppliers and overall communities will implement its principles?
Are we really going to be able to change our mindset quickly enough so that we do not just transpose the current model into a more circular one without ensuring it brings more than just profit maximisation? Essentially that is what has led us to where we are today.
Just a day before the start of the Davos conference in January, Oxfam reminded us that “just eight individuals, all men, own as much wealth as the poorest half of the world’s population”.
So let’s look at the circular economy through a social lens. The mantra of generating as much money as we can, no matter what, seems not to be questioned enough when claiming to foresee a better circular world. We need to push the model a bit further to look at its potential social impact and truly evaluate the way we should aim to generate genuine circular value. This graph summarises the thinking behind ensuring the circular economy is also taking into account the wider societal challenges this world needs to fix, to ensure it will have positive long-term outcomes.
Applying circular principles to society could provide a comprehensive picture of how we could design a circular model of benefit to all. I have written five articles on LinkedIn that give some further detail to my thinking, but I’ve included a short summary here.
Circular economy 2.0
Essentially, circular economy 2.0 is claiming that we cannot solve environmental and economic challenges without also fixing the social challenges. Our belief system, based on the corporate and individual success being calculated by ‘how much financial return have I generated no matter what’ needs to evolve into an embedded approach of value optimisation and, indeed, beyond just taking business decisions on the narrow- minded financial spectrum.
We should be looking to add three new circular principles focusing on social inclusiveness, financial ability and innovative labour. The circular economy 2.0 is aiming at a design solution to poverty, in parallel with a system that will rid us of waste, enabling a three dimensional comprehensive approach of what could be an economic model benefiting all tomorrow.
Don’t just reuse, revalue instead
Depending on where you live on the planet, the term ‘reuse’ (the smaller loop of the circular economy) could be misinterpreted. ‘Revaluing’ technical and biological nutrients may be more appealing and at the source of many more innovative solutions, even though we have current limitations when it comes to the continuous use of materials, such as expecting them to perform as well as in day one.
By pushing our boundaries, it could help us think outside of the box more easily and unleash a number
of innovative solutions. Let us keep pushing this model beyond its own limits, so that we constantly release unexpected concepts that will help us advance further into new creative dimensions.
Doing more with more, not less
Here, we need to create abundance by implementing a regenerative strategy. It’s all about thinking positively, and reminding ourselves that we are able to turn things around and transform a dark forecast into a very appealing future. The future is up to us to design, whether we take the individualistic or the collaborative route. We are clever enough to change the direction of the current path we have taken and see the world we live in with new lenses – and regenerative ones hopefully.
In terms of cleverness, nature will always beat us, and it will always be by a long way. Humbleness will help us understand nature’s ordered complexity, especially its many functions (such as biomimicry),
so that we can implement what it does best: applying its regenerative principles within our daily business practices. The world that will unfold before you will be unexpected but true.
Safe and just circular principles
In order to implement a circular economy 2.0 – i.e. designing poverty out in parallel to designing waste out – one has to add complementary principles to the current three circular principles as defined by The Ellen MacArthur Foundation. To include equality through business practices, financial ability and innovative human-centred labour – each of them may either be missing from the current model (such as equality or financial ability), or not emphasised enough as a priority (such as human labour).
This looks at Doughnut Economics, which was designed by Kate Raworth, a former senior researcher
at Oxfam. Within this single representation of our planetary and social boundaries, she explains how
we can live within a safe and just space – and the link between her doughnut model and the circular economy.
We now have the foundations of extended circular economic thinking (waste and poverty being the targets of our design thinking task of the coming century).
We also have a set of comprehensive principles embedding the social angle that demonstrate what we expect of the future economic model to achieve. Now, we need to ensure we prioritise ‘us’, humans, away from current linear priorities.
By adding a human sphere, we therefore have a clearer perspective of where our priorities are and, where we would Optimise Circular Value (OCV) when taking decisions at corporate or governmental levels.
Also keep in mind the circular golden rule: the biosphere comes first as a circular urgency. This is principle number one: preserving and enhancing our natural capital.
Then comes the protection of the humansphere: this is our regenerative link (in-between the biosphere and the technosphere) that will spur innovative actions and new ways to use manpower with the aim of preserving both the natural capital, on one hand, and the circulation of technical nutrients on the other.
A framework for business models now needs to be proposed. We need to turn current destructive human activities (proven to be behind most negative impact on our biosphere) on their heads to ensure that humans will be at the origins of the rebuilding of our biosphere in the years to come.
The humansphere business model framework ensures that all human functions, capabilities, abilities and other energies will be valued first prior to looking for alternative ‘logical mechanics’ solutions.
A number of business models are possible, but the idea is to apply the diverse concepts of the circular economy (performance economy, biomimicry, blue economy, and so on) on ‘humans’ by involving them as-a-resource or as-a-service.
Applying all circular concepts, first to enhance our natural capital, then preserving our human capital, to only then look at revaluing our economic capital is the correct order of priorities that we need to follow in our upcoming ‘next economy’.
Alex Lemille is a circular economist, looking at how to optimise circular value and assess social return. He is based in South Africa. More detailed versions of his articles referred to here are available on LinkedIn.
This article also appears in Issue 6 of CWS magazine. Get your free, obligation-free trial of the mag here.